Reserve Bank of India reiterated on Tuesday that the economy will grow at six per cent during 2003-04.

"The (6.0 per cent) projection is based on 96 per cent monsoon. As of now it remains so. Let's see what happens," RBI Governor Bimal Jalan told PTI in New Delhi.

In its April Monetary and Credit Policy, RBI projected a higher growth during 2003-04 backed by a better agriculture output, industrial revival and robust performance of service sector.

The central bank's projection is based on the assumption of satisfactory spatial distribution of monsoon. The Indian Meteorological Department forecast normal 96 per cent rainfall for this fiscal.

This was in the backdrop of a dismal 4.4 per cent GDP growth during 2002-03 mainly due to a 3.1 per cent fall in farm produce last fiscal.

Jalan also expressed confidence that inflation rate will fall gradually. The WPI-based inflation rate slid for the fourth consecutive week to 5.9 per cent for week ended May 10. RBI expects inflation to be in the range of 5-5.5 per cent during this fiscal.

The central bank would maintain its soft interest rate bias. Jalan also ruled out repo rate cut immediately.

RBI slashed the benchmark bank rate by 0.25 per cent to 6.0 per cent in the Credit Policy in April.

The apex bank also decided to reduce Cash Reserve Ratio by 0.25 per cent to 4.5 per cent from June 14, as part of efforts to ease credit flow further.